MFOHome About Commentary Discussions Funds The Best Resources Support Us!

Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

Sign In Register

Categories

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

Global Financial Market Crisis Ahead?

davfordavfor
edited August 2018 in Fund Discussions
This New York Times article might be worth considering....

Turkey’s Financial Crisis Surprised Many. Except This Analyst.
Yet he is doubling down on his doomsday message: The river of global cash will dry up, the dollar will spike and there will be a series of financial seizures. Investors, he thinks, will flee developing economies, then Europe and eventually the American stock and bond markets.

“It won’t be a banking crisis this time around — it will be a financial market crisis,” Mr. Lee said. “And I am very confident that it will happen.”
See: https://www.nytimes.com/2018/08/11/business/turkey-lira-crisis.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news



Comments

  • David_Snowball
    I rather wish that the Times had taken, well, the time to consider a simple question: "is there any reason to believe this guy?" Our only two bits of data are (1) European investment funds buy his newsletter and (2) he's been bearish for years. Neither of those, on face, either qualifies or disqualifies him so I'm left thinking "uh huh, they somehow find this one guy and he ..."
  • VintageFreakVintageFreak
    The problem is the headline with a question mark next to it.
    And the fact that all of us are stupid.

    Will It Rain Tomorrow?
  • Old_JoeOld_Joe
    Nonsense. The global financial markets will crash next Tuesday at exactly 9:03AM EST. If it happens, remember that I predicted it. If it doesn't, David Snowball must have predicted it.
  • hank
    edited August 2018
    “Turkey is the canary in the coal mine,” Mr. Lee said on Friday. “We are going have another crash that will be worse than 2008 in certain ways.”

    Ha! Love the cliche. But my sense is we need more coal mines to house all the canaries. Bill Fleckenstein thinks it’s Tesla. I’m thinking Bob Mueller. Who knows?

    I will say that perhaps half of the big U.S. market downdrafts I can remember over the past 20-30 years have had some root in the EM markets. Probably because they’re the most sensitive to credit / interest rate issues which than spread to the developed markets. The 1997 Asian Market Crisis is one. https://en.m.wikipedia.org/wiki/1997_Asian_financial_crisis
  • Old_JoeOld_Joe
    edited August 2018
    “Turkey is the canary in the coal mine,” Mr. Lee said on Friday.

    I'm not sure that I understand all of this. Is he saying that they replaced the canaries in the coal mines with turkeys? I was under the impression that usually turkeys owned and ran the coal mines. This coal mine stuff can really be confusing.
  • hank
    edited August 2018
    @Old_Joe, Go dig your own turkey mines. We’re talking canaries here!

    (But nice attempt to butcher the metaphor):)
  • Old_JoeOld_Joe
    See, there you go making this even more confusing. This coal mine stuff is for the birds!
  • hank
    edited August 2018
    @Old_Joe, This book should help unconfuse you. https://www.amazon.com/Animal-Farm-George-Orwell/dp/8187138750/ref=sr_1_3?ie=UTF8&qid=1534117656&sr=8-3&keywords=animal+farm+by+george+orwell

    Your homework, in addition to reading this book, is to memorize these prophetic words from it: “All animals are equal, but some animals are more equal than others.”

    Than you are to compose a 50-word or longer piece of expository prose about it in which you are not allowed to mention @Ted.
  • catch22catch22
    @hank
    Recognize the bridge in the photo?
    I assume the person on the beach is Mr. Lee, yes?
  • hank
    edited August 2018
    catch22 said:


    Recognize the bridge in the photo? I assume the person on the beach is Mr. Lee, yes?

    Thanks @Catch for pointing out the magnificent Mighty Mac.

    No - I was too engrossed in the feathery creatures alluded to in the mixed metaphors than to notice the photo. Yes, I assume that’s Mr. Lee also.

    Would guess the shot is from the Mackinaw City side looking north towards Saint Ignace. Was just up there last week. Trip into Canada (Manatoulan Island) and than stopped and biked around Mackinaw Island on the way home.

    Regards
  • Old_JoeOld_Joe
    "in which you are not allowed to mention @Ted."

    @hank- Awww, come on now. Play fair! :)
  • catch22catch22
    @davfor
    I wandered a bit from your subject post, relating to the Mackinac Bridge in the article photo; which has a 5 mile span connecting the lower and upper peninsulas of Michigan.
    As to the subject, I'm not sure why NYT chose this particular piece; but Mr. Lee is likely not wrong about possibilities. There is a very large boat load of money in the form of bond issuance globally.
    If one were to envision the financial markets perched upon an eight leg stool of bonds and other cash substitutes; not all legs would have to break to cause a problem.
    CDS (credit default swaps); being insurance against bond defaults and other forms of derivatives are still in place, not unlike the market melt 10 years ago. CDS instruments, to the best of my knowledge are still not monitored or under scrutiny by any official agency, U.S. or global. Although I am sure the Fed. and U.S. Treasury know the amounts.
    Apologies for the thread drift via the "bridge".....I don't like or appreciate excessive thread drift either.
    Regards,
    Catch
  • InformalEconomist
    For those with a particular focus on emerging economies: since the last crisis, they have take steps to immunize themselves against (other countries') rate changes (think loans with interest calculated in sovereign currency versus somebody else's) and global flows of $ into and out of their own economies.

    An interesting read is David P. Lubin's Dance of the Trillions: Developing Countries and Global Finance, which should be out around now (Brookings/Chatham House). Lubin is head of emerging markets economics at Citi - London. There are a couple of YouTube videos of him speaking on Russia, e.g.
  • larryB
    @catch22. Thanks for pointing out Big Mac. I last drove across it in 1960 in my parents Impala rag top. A memorable day and my dad even seemed cool for putting the top down. Those were the days,,, or so it seemed.
  • hank
    edited August 2018
    An interesting thread. Agree we should try to get it back on track (as @Catch is attempting). Story dominates the news. The Pres. over there is now calling on all Turks to bring all their gold, silver, gems, artwork (anything of value) to the government and accept lira in exchange to help support his failing currency. Wonder what @Rono would think about that idea?

    Just one more off-topic diversion - Can’t help wondering: Why Is Mr Lee standing next to the Mackinaw Bridge? Is He thinking of jumping? Or, is he afraid others might if the global economy worsens? Or maybe he views it as a Bridge Over Troubled Waters (made famous by Simon & Garfunkel). But it’s also suggestive of the old “Wanna buy a bridge?” laugh line.
Sign In or Register to comment.